Determining How Much Life Insurance I Need
October 18, 2022
Finding out how much life insurance you may need is essential to establishing proper procedures for your needs. Life insurance provides financial support and stability for your loved ones in the event of your death. Additionally, life coverage gives you peace of mind regardless of your estate's condition. The right coverage takes careful consideration and thorough understanding. Thus, you must consider many factors, including the coverage amount, types of policies, and your ultimate financial goals. Learn about your options to ensure proper coverage for your family's needs.
Understanding the Types of Life Insurance
There are two primary types of life coverage. Each has its advantages for different situations. How much life insurance do you need, and how do they differ?
Term Life
Term coverage is, as the title suggests, valid for defined terms. The policy ends at the end of the specified term, whether 10, 30 or more years. You can buy another policy at that time or convert to a different type of coverage. If your concern is for coverage until your children go to school, a 20-year term may be enough. You may need to be on a 30-year term to cover your home mortgage.
Whole Life
Whole life insurance is a policy that will remain with you as long as you pay the premiums. These policies remain in force until your death, so plan accordingly with a benefit amount that covers future life changes, including marriage, children, or a mortgage. Whole life coverage should encompass all of your future financial needs from the start because of the longer lifespan of the policy.
Exploring the Benefits of Life Insurance
Life policies ensure your loved one's financial stability as they mourn and adapt after your death. Life coverage offers many benefits for you to consider as you choose your policy.
For example, one of the benefits of life coverage is that it does not restrict you to a single policy. You can carry multiple policies to meet specific needs. Combine a term policy for your mortgage or burial costs plus a whole life policy for your beneficiaries and your debts for comprehensive coverage and peace of mind.
Life coverage is versatile enough to meet your changing needs as life stages change. Some policies even generate cash value.
Calculating Your Life Insurance Coverage
There are several ways to calculate the ideal death benefit for your policy and how much life insurance you need. Some individuals prefer to multiply their annual salary by ten to arrive at the proper coverage. Others take time to consider their salaries and potential raises, debts, burial costs, trust funds, and increased costs for domestic services that may be necessary.
Ask your insurance agent to help you determine the proper benefit amount for your policy based on your family's financial needs, the types of life insurance you are buying, and any inheritance or donations you want to provide.
About 1891 Financial Life
At 1891 Financial Life we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.